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What Goes On under the Hood? How Engineers Innovate in the Automotive Supply Chain

In: US Engineering in a Global Economy


  • Susan Helper
  • Jennifer Kuan


The questions addressed in this volume are motivated by the recognition that engineers play an important role in generating innovation and economic growth. In this chapter, we seek to offer some description of engineering work by looking in detail at a specific manufacturing industry—firms that supply automakers—to gain insight into how engineers create innovation. Autos account for 5% of US GDP and in 2011, 70% of auto suppliers contributed design effort, a task typically performed by engineers, making the auto supply chain an important context in which to study engineering and innovation. Some highlights from our original survey data include a wide range in terms of size and strategies of supply chain companies; a majority was small- to medium-sized, often family-owned. We observed barriers to patenting for manufacturing firms developing process rather than product innovations. And interviews revealed the importance of customers for the innovative efforts of supplier firms. Certain Japanese customers were preferred because they shared expertise and helped suppliers improve, while other, American, customers were viewed as having unreasonable demands for regular, incremental price reductions and did not offer technical or organizational support.
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Suggested Citation

  • Susan Helper & Jennifer Kuan, 2018. "What Goes On under the Hood? How Engineers Innovate in the Automotive Supply Chain," NBER Chapters, in: US Engineering in a Global Economy, pages 193-214, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberch:12690

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    References listed on IDEAS

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    Cited by:

    1. Erling Barth & James C. Davis & Richard B. Freeman & Andrew J. Wang, 2018. "The Effects of Scientists and Engineers on Productivity and Earnings at the Establishment Where They Work," NBER Chapters, in: US Engineering in a Global Economy, pages 167-191, National Bureau of Economic Research, Inc.
    2. James Harrigan & Ariell Reshef & Farid Toubal, 2018. "Techies, Trade, and Skill-Biased Productivity," NBER Working Papers 25295, National Bureau of Economic Research, Inc.
    3. Delgado, Mercedes & Mills, Karen G., 2020. "The supply chain economy: A new industry categorization for understanding innovation in services," Research Policy, Elsevier, vol. 49(8).
    4. Daniel Kuehn & Hal Salzman, 2018. "The Engineering Labor Market: An Overview of Recent Trends," NBER Chapters, in: US Engineering in a Global Economy, pages 11-46, National Bureau of Economic Research, Inc.
    5. Harrigan, James & Reshef, Ariell & Toubal, Farid, 2021. "The March of the Techies: Job Polarization Within and Between Firms," Research Policy, Elsevier, vol. 50(7).
    6. Jürgen Janger & Agnes Kügler & Andreas Reinstaller & Peter Reschenhofer & Fabian Unterlass, 2017. "Austria 2025 – A New Strategic Innovation Policy Framework. Addressing Structural Change and Upgrading," WIFO Studies, WIFO, number 59290, February.

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    More about this item

    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment


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